BMW's hometown mulls diesel ban over 'shocking' emissions

FRANKFURT -- Munich, home to BMW Group, is considering banning diesel vehicles because of "shocking" NOx emissions in the city, its mayor told the Sueddeutsche Zeitung on Wednesday.

The scandal over rigged diesel-emissions tests at Volkswagen Group has thrown the engine technology into doubt and has highlighted carmakers' struggle to comply with ever stricter rules capping NOx emissions.

"As much as I would welcome avoiding such bans, I think it is just as unlikely that we can continue to do without bans in the future," Munich's mayor Dieter Reiter was quoted as saying by the newspaper on Wednesday.

Asked about the latest NOx readings across the city, he said: "The results are shocking, nobody expected this."

The city of Stuttgart, home of Mercedes-Benz and Porsche, is preparing to keep the city free of some diesel vehicles from next year.

Between 133,000 and 170,000 vehicles could be affected by a ban in Munich, depending on how strict it will be, the paper said. Cars meeting the latest Euro-6 emission rules would be exempted, it said.

About half the new cars sold in Germany ran on diesel before the VW scandal broke, though diesel-market share has since declined.

Diesel accounted for just 40 percent of Germany's new-car sales in March, compared with 45.8 percent last year and a high of 48.1 percent in 2012.

Due to strong diesel demand in their home market, and given the technology's fuel efficiency, Germany's three major carmakers VW, Mercedes and BMW have traditionally spent heavily on diesel plants and development.

The prospect of diesel bans is seen as weighing on the used vehicle market. Carmakers' leasing and vehicle financing divisions rely on stable used vehicle values because car loans are backed by the value of the underlying vehicle.